Understanding the System that Can Keep Your Employees Healthy and Happy
When a Colorado Springs or Denver employer provides health insurance coverage for its employees, the benefits can be substantial. A robust and affordable group health plan will help your company attract and retain top talent, reduce absenteeism and increase productivity, and save your business money in the long run. But the mechanics and requirements involved when an employer provides health insurance are often unfamiliar and confusing to those charged with finding and implementing a plan.
Working with an experienced Colorado group health insurance broker provides the best way to navigate the process and learn about your options. But it never hurts to get the basics down before you reach out to a broker to launch your program.
What Is Group Health Insurance for Employers?
When an employer provides health insurance coverage to employees, they usually do so through group health insurance plans. In Colorado, health insurance carriers such as Humana, Aetna, Kaiser Permanente, Anthem, UnitedHealthcare, and several other companies offer multiple plans specifically designed for small businesses’ needs and budgets.
Here’s how group health insurance works. A company signs up and purchases the insurance from a carrier for the “group,” which consists of employees and their dependents. Plans can cover full-time employees only, or they can provide coverage to part-time employees as well.
A company that enrolls in a group plan will typically pay the full fee for the plan to the health insurance company while also deducting contributions from the paychecks of employees who participate in the program.
Do All Companies Need to Provide Health Insurance to Employees?
No. Under the Affordable Care Act (ACA), if your business has less than 50 full-time or “full-time equivalent” (FTE) employees, your business has no obligation under the ACA or any other law to provide group health insurance to its workforce.
As defined in the ACA, a full-time employee works 30 hours or more each week or 130 hours each calendar month, including vacation and paid leave time.
However, even if a company employs less than 50 full-time employees, coverage may still be required if they have 50 or more full-time equivalent employees. The difference here is the full-time equivalent employees, or FTE, which the ACA defines as, “a combination of employees, each of whom individually is not a full-time employee, but who, in combination, are equivalent to a full-time employee.”
The IRS has some helpful guidance that explains in greater detail whether your business falls below or above the 50 employee threshold and whether your company must offer coverage.
If, however, your company has 50 or more full-time or FTE employees, it is an “applicable large employer” (ALE) under the ACA and must offer an ACA-compliant group health insurance plan to at least 95% of your full-time employees.
Can Any Business Qualify for a Group Health Insurance Plan?
No. If you are self-employed and have no employees (even if you engage electricians as independent contractors from time to time), group health insurance is probably not an option. You can, however, work with Preferred Insurance to find individual and family health insurance coverage that fits your needs.
However, even if your business has just one full-time employee, it will likely be eligible for group health insurance coverage so long as that employee works at least 30 hours per week and is not an independent contractor, not your spouse or another relative, and not a part-owner or business partner of your company.
What’s the Best Way for an Employer to Provide Health Insurance for Its Employees?
Perhaps the most challenging part for business owners considering providing health insurance to their workforce is knowing where to start. How can you know what to look for if you don’t know what you need? How can you choose among scores of health care plans available in Colorado without knowing the pros and cons of each one? When will you have the time to educate yourself about how to enroll employees in coverage and administer the plan after you do?
Working with a reputable group health insurance broker in the Denver and Colorado Springs area proves the best way to understand your coverage needs, learn about your options, and select an affordable, easy-to-use group health insurance plan that you and your employees will love. A skilled, knowledgeable independent group health insurance broker can get you quotes and coverage options from multiple carriers, so they can offer you plenty of choices at prices that fit any budget.
Preferred Insurance: Colorado’s Premier Small Business Health Insurance Solution
Preferred Insurance works hand-in-hand with small businesses throughout the Colorado Front Range to select and implement group health insurance programs that provide their employees with the best benefits at the most affordable rates. We are locally owned and operated and deliver free quotes in less than 48 hours.
Contact Preferred Insurance today to arrange for a free consultation to discuss your small business health insurance needs.